Daily News - Brown urges G-20 to seal 'global growth pact' (AP) Daily Business News
AP – Chairman of the Board of Directors, BNP Paribas Michel Pebereau speaks during a session 'Keeping the … BRUSSELS – Less than a week ahead of a meeting of the Group of 20 rich and developing nations in China, former U.K. Prime Minister Gordon Brown has urged the world's most powerful economies to seal a "global growth pact" to fight unemployment.
Brown was joined on Saturday by other top economic policymakers in his call for a transformation of the G-20 to help it remain relevant in a global economy torn by clashing national interests — although their focus differed somewhat from his.
To tackle high unemployment in poor and rich nations and a lack of economic growth in Europe and the United States, politicians need to look beyond merely reducing deficits, Brown said.
"All around the world deficit reduction has become the big issue when actually it's only one of the issues," Brown told a panel in Brussels debating the relevance of the G-20. The panel also included Pascal Lamy, the director general of the World Trade Organization, and World Bank President Robert Zoellick.
Brown said the G-20 was at a juncture that would decide whether it can deliver prosperity to poorer nations in the Middle East and North Africa as well as more established economies in America and Europe.
His comments come as tens of thousands of people were marching through the streets of London to protest austerity measures and political upheavals continue in Northern Africa and the Middle East triggered in part by huge youth unemployment.
They also come ahead of a meeting of G-20 central bank governors and cabinet ministers in Nanjing, China, on Thursday — convened by French President Nicolas Sarkozy — to discuss reform of the global monetary system. France has made such a reform one of the focal points of its yearlong presidency of the G-20, along with reducing economic imbalances and volatility in commodity prices.
While Brown said an overhaul of the monetary system was necessary, he chose to take a broader view.
"I cannot imagine that the world can solve the unemployment problem we've got without closer economic cooperation," he told the panel, organized by the United States' German Marshall Fund, a nonpartisan public policy group.
If China increases domestic consumption faster than expected, the U.S. manages to rebalance its own expansive consumption and investment patterns and Europe can overhaul its struggling economies, the global economy could grow about 4 percent faster by 2014, create 50 million jobs and pull some 100 million people out of poverty, Brown said citing a report by the International Monetary Fund.
But he cautioned that there was a lack of political will on the international level to compromise on domestic interests. "We are retreating into national silos just when international economic cooperation is more needed than ever," Brown warned.
Brown was one of the politicians central to heaving the G-20 into the limelight of global decision making in the wake of the financial crisis. The group's meeting in London in 2009, when Brown was British prime minister, is widely seen as one of its most successful, forging deals on tighter financial regulation.
Since then, however, the G-20 has been struggling to create agreements between economies on widely divergent growth paths such as the U.S. and China. Its most recent meeting in Paris in February was criticized for concluding a watered down deal on reducing dangerous economic imbalances.
Lamy and Zoellick also said the G-20 needed to transform if it wanted to remain relevant — the WTO chief pointed to paralysis over disagreements between the U.S. and China, while the World Bank president said the overrepresentation of Europe was being seen by many as coming at the expense of poorer African and Asian nations.
However, both stressed that a focus on deficit reduction was unavoidable at the moment. Zoellick, who worked under former President George W. Bush, said the U.S. needed to address its high debt and deficit.
Asked about the anti-austerity demonstrations in London, Lamy said that in his opinion, "for the moment a number of countries have no choice but to go through this painful period."
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